WHEN NewsCorp officials gathered
in the Hong Kong convention center last March to unveil their latest Chinese
internet investment, a tall woman handed out a business card that read “News
Corporation/Wendi Deng Murdoch.”

Deng is not a NewsCorp employee.
Once a junior executive at the company’s Star TV in Hong Kong, Deng, 31, quit
her post before marrying NewsCorp chairman Rupert Murdoch last year. Since
then, she has been portrayed ¾ by Murdoch and the company ¾ as a traditional
housewife who attends to decorating, her husband’s diet and the like.

But Deng is no homebody. Though
she doesn’t have a formal position with her husband’s media empire, she has
quickly asserted her influence over NewsCorp’s operations and investments in
Asia, its most important growth market. Working with her stepson, James
Murdoch, 27, Deng has initiated or advocated Chinese internet investments
totaling between $35 million and $45 million, according to a top NewsCorp
executive. With her advice, the company has also formed partnerships with cable
companies in the region looking to upgrade their systems for high-speed video
and internet access.

Murdoch, who is 69, has never
hesitated to put family members to work in his businesses. Last month, he named
his eldest son, Lachlan, 29, deputy chief operating officer, in a move partly
aimed at clarifying that he is his father’s heir. James serves as chief
executive of Star TV and has carved out Asia and the internet as his province.
Even Murdoch’s ex-wife, Anna Mann, whom he divorced last year, has an office
and assistant at NewsCorp’s New York offices, although she no longer has an
active role with the company.

Now, Deng is rising to a place of
prominence in the family business.

People within NewsCorp and
outsiders involved in the Chinese internet and media industries say she
identifies potential investments for her husband’s company and acts as his
liaison and translator in China.

These people say Deng is well
suited for this unusual role. The daughter of a factory director in Guangzhou,
China, Deng came to the U.S. 12 years ago with the aid of a California couple.
The husband in that couple later left his wife for Deng. She mastered English,
climbed from a California college to Yale’s business school and eventually
landed at Star TV in Hong Kong.

Having left China in obscurity as
a teenager, Deng is now returning in grand style, as the wife and adviser of a
global media baron.

“Wendi gives NewsCorp a Chinese
face in China,’ says Joseph Ravitch, co-head of the global media practice at
Goldman Sachs Group, which advises NewsCorp on its Asia strategy. “She
represents not just the company but the owner, and that’s critical in a country
where families are very important.’

Murdoch has long been fascinated
by the potential of the Chinese market, and his Fox studio was a pioneer in the
country. But at times, he has seemed to lack the feel for subtleties his wife
is said to have. In 1993, shortly after he acquired control of Star TV, Murdoch
made a still-notorious remark that satellite TV would prove “an unambiguous
threat to totalitarian regimes everywhere’.

China immediately retaliated by
banning private ownership of satellite dishes. Reception by private households
of Star TV and its affiliate, Phoenix Satellite Television, remains illegal in
China, though many cable operators and residential compounds defy the ban and
carry the channels.

Murdoch gradually repaired
relations with the Chinese. He pulled the BBC from Star TV, making the channel
more palatable to the Beijing government. He sold the South China Morning Post
to a pro-Beijing businessman. And at his behest, NewsCorp’s HarperCollins publishing
unit killed a book contract with the last governor of Hong Kong, Chris Patten.
Today, NewsCorp’s officially restricted Phoenix channel is a favorite among
urban Chinese households, and the company has greater access to the mainland
market than any of its competitors.

With the exception of an odd
mention in the newspaper gossip pages or a glossy magazine photo spread, Deng
has stayed out of the public eye. She accompanies Murdoch on his worldwide
jaunts and stayed at his side when he received prostate cancer treatment last
summer.

Shortly after they were married
in June 1999, Murdoch told Vanity Fair magazine that his relationship with his
new wife precluded her from working for NewsCorp. Instead Deng was “busy
working on decorating the new apartment’ in Manhattan. He said his bride, a
graduate of the Yale School of Management, was “a bit frustrated’ by the narrow
scope of her activities, adding, “We’ll just have to resolve that somehow.”

The resolution has taken Deng far
beyond choosing upholstery. She has become a de facto diplomat on behalf of
NewsCorp in China, a country where good relations with government officials is
critical to success. Over the past year, she has met with politicians from
President Jiang Zemin down. In one of her few answers to written questions,
Deng said she had met the Chinese president only at large gatherings on “formal
occasions.” Deng also said she hadn’t initiated any meetings with “top level’
Chinese government officials.

In recent months, Deng has
appeared with increasing frequency at the side of her husband and stepson James
in NewsCorp business meetings. She sometimes intervenes to smooth over
potentially awkward situations. In March, for example, she and the
father-and-son Murdoch team met a well-connected Chinese businessman in
Shanghai, in the hope of advancing NewsCorp’s push into the Chinese TV market.
The meeting got off to an uncomfortable start, at least partly because of the
language barrier between the Murdoch men and their host, according to a participant.
But Deng used her bilingual fluency to put everyone at ease,.

Deng has become deeply involved
in the company’s analysis and negotiation of business transactions in China,
according to people who have dealt extensively with NewsCorp. Entrepreneurs
trying to interest the company in their ideas often go first to Deng, according
to a person close to NewsCorp She has told this person she sometimes receives
more than 100 emails a day from Chinese people with business proposals. She
sometimes meets entrepreneurs at NewsCorp’s offices in Beijing or at one of the
city’s business- gathering spots, such as the St Regis bar.

NewsCorp executives say that
among the deals Deng has helped forge is a recent multimillion-dollar company
investment in Netease.com, one of the most popular web portals that target the
mainland. Earlier this year, she worked with James Murdoch to negotiate
NewsCorp’s investment of more than Dollars 10m in the Chinese-language internet
company renren.com, according to Anthony Cheng, founder of the website. Cheng
recalls that at one meeting about renren.com, Deng displayed her deep
involvement when she grilled him on the difference between the site’s marketing
strategies in Beijing and Shanghai. She calls him with ideas from time to time
on how to improve his company, Cheng adds. “She’s very keyed into all the News
Corp and Star TV properties and how to better link them,’ he says.

Deng initiated News Corp’s
investment last December in SinoBIT.com, a Beijing website that seeks to link
entrepreneurs to investors online, according to Steve Sun, the site’s
co-founder. She did so by introducing Sun, whom she knew through mutual friends
from Yale, to James Murdoch, Sun says. At the same time, people who have done
business with Deng say she appears to take great pains not to overstep her
unofficial role. Sun notes, for example, that she didn’t attend a second
meeting between him and James Murdoch, at which the terms of the investment in
SinoBIT.com were finalized. “She gave James the right to make the decision,’
Sun says.

Deng hasn’t neglected the
business of minding Murdoch, who has undergone the kind of change in appearance
often associated with a man’s marrying a much younger wife.

Murdoch for decades preferred
establishment addresses such as New York’s Upper East Side and Bel Air in Los
Angeles. But after remarrying, he and Deng set up home in Manhattan’s trendy
SoHo district, a few blocks from the apartment of Murdoch’s son, Lachlan. Known
for his British-style double-breasted business suits, the older Murdoch started
sporting black turtlenecks.

NewsCorp executives say that
sometimes he even forgoes a tie at the office, once unthinkable. He told Vanity
Fair he is pumping iron with a personal trainer at 6 a.m. and downing a
morning concoction of fruit and soy protein.

When Deng began appearing at
Murdoch’s side about two years ago, NewsCorp executives wondered where she had
come from and how she got there. They knew nothing about her other than that
she joined Star TV as an intern in 1996, shortly after obtaining an MBA from
Yale. Deng herself hasn’t commented in the press about her background.

Born Deng Wen Di, in the eastern
Chinese city of Xuzhou, her parents later moved to the southern city of
Guangzhou. Deng was the family name. She later compressed her Chinese first
name into “Wendi.” Deng’s father served as director of a machinery factory in
Guangzhou. The family lived in a three-bedroom apartment, unusually large by
Chinese standards. Wendi Deng has two sisters and one brother. A good student and
champion volleyball player, Deng had enrolled in Guangzhou Medical College by
the age of 16.

Her ticket out of China came in
1987, when she met a Los Angeles couple, Jake and Joyce Cherry. Cherry, then
50, was working in Guangzhou, helping the Chinese to build a factory to make
freezers for food-processing plants. The Cherrys’ interpreter told them of a
young woman who was looking for help with her English. Joyce Cherry, then 42,
says she began tutoring the teenager. In the fall of 1987, Joyce Cherry returned
to Los Angeles to enroll her two children in elementary school. Cherry stayed
in China to finish the factory project.

Soon after Joyce Cherry was
resettled in Los Angeles, she says, her husband called to say that Deng wanted
to come to the U.S. to study. He asked Joyce Cherry to help complete the
paperwork and get an application ready for a local college. The Cherrys
sponsored Deng’s bid for a student visa and agreed to put her up until she had
established herself. The 19-year-old arrived at the Cherry home in February of
1988. She shared a bedroom and bunk beds with her hosts’ five-year-old
daughter.

All was not well, however,
between the elder Cherrys. Cherry, who arrived home shortly after Deng came to
California, had grown physically ill in China from a combination of overwork
and poor diet. The spouses’ separation had strained the marriage, the Cherrys
concur. At the same time, Joyce says she had grown increasingly suspicious
about Deng’s relationship with her husband. She recalls discovering photographs
her husband had taken of Deng in coquettish poses in his hotel room in
Guangzhou. Cherry confirms he became infatuated with the young woman. Once they
were in Los Angeles, he says, Deng started making recommendations about his
diet and wardrobe.

When her husband and Deng didn’t
return home some evenings, Joyce says she concluded they were having an affair.
She told Deng to leave, and Cherry left soon afterwards. He moved into a nearby
apartment with Deng, who had enrolled at California State University at
Northridge, a commuter college in the San Fernando Valley.

The Cherrys divorced, and Cherry
married Deng in February 1990. But that union didn’t last. Cherry says that
about four months after the wedding, he told Deng to leave because she had started
spending time with a man named David Wolf. Cherry was 53 at the time. Wolf was
in his mid-twenties, only a few years older than Deng. Wolf, who declined
interview requests, worked in the early Nineties for an import-export company.
He spoke some Chinese and was interested in a career in China, according to
someone who knew him.

Cherry says he and Deng were
briefly reconciled at one point, but they split up for good when it became
clear she was continuing to see Wolf. “She told me I was a father concept to
her, and it would never be anything else,” Cherry recalls. “I loved that girl.’

Divorce records filed with the
Los Angeles County Superior Court show that the Cherry-Deng marriage lasted two
years and seven months. That was seven months longer than what was required for
Deng to obtain a green card, allowing her permanently to live and work in the
U.S. as a resident alien. Cherry says he and Deng actually lived together for
“four to five months, at the most.”

They haven’t spoken since 1996,
he adds.

During the early Nineties when
she was married to Cherry, and for a time after that, Deng on some occasions
introduced the tall, well-dressed Wolf as her husband, according to people who
knew Deng. Ken Chapman, a California State economics professor, recalls that
the last time he saw his former student, in 1995, she handed him Wolf’s
business card and said she could be reached through her “husband.” At 5’10”
herself, Deng and Wolf made a striking couple, according to people who knew
them. They shared several addresses during the Nineties and told friends that
they had met in China, when Wolf had been there on business.

For a time in the early Nineties,
the couple worked at a suburban Los Angeles gymnastics academy operated by Li
Ning, a Chinese three- times Olympics gold medallist. Deng served as a liaison
between the gym’s Chinese coaching staff and parents of the school-age
clientele; Wolf, as the gym’s general manager. Today, Wolf works as a director
in the Beijing office of Burson-Marsteller, a large PR firm.

In 1996, Deng graduated from Yale
and began looking for a job. Through a friend, she met Bruce Churchill, who
then oversaw finance and corporate development at NewsCorp’s Fox TV unit in Los
Angeles. She lacked experience in the entertainment industry, but had an Ivy
League business degree and was fluent in English and Mandarin, attributes of
particular value to News Corp’s struggling Asian satellite service, Star TV.
Churchill, who was on his way to Star TV as deputy chief executive, offered
Deng an internship in Hong Kong. That grew into a full-time job.

Even though Deng was a relatively
junior employee, she took an active role in planning Star TV’s activities in
Hong Kong and China, according to former NewsCorp colleagues. She helped build
distribution in China for its Channel V music channel, for example, and
explored interactive TV opportunities for the company’s News Digital Systems
arm.

Rupert Murdoch frequently talks
to NewsCorp’s business development executives around the globe, so it isn’t surprising
that one day he would cross paths with Deng. In early 1998, she first appeared
at his side, acting as his interpreter in Shanghai and Beijing.

By that summer, the Star TV staff
was buzzing about romance between the pair. After dinner meetings in Hong Kong,
they were observed holding hands. In May, Murdoch had separated from his wife
of 31 years, Anna. The split surprised even his closest aides, who say they
hadn’t seen any sign of a rupture.

Murdoch told senior Star TV
executives in the autumn of 1998 that his relationship with Deng was “serious.”
Star TV’s then-chairman, Gareth Chang, told Murdoch at the time that it was a
bad idea for Deng to remain on staff, given her personal relationship with the
parent company’s chairman. That wouldn’t be a problem, Murdoch replied, because
Deng would be resigning and moving with him to New York.

Today, Rupert and Wendi Murdoch
spend time not only in SoHo, but also at their home in Bel Air and on a ranch
near Carmel, California. Murdoch controls about 30 per cent of NewsCorp, a
stake worth roughly $8.7 billion. He has said the stock is owned by trusts that
name his three children as beneficiaries.

Rupert and Anna Murdoch’s divorce
became final in June 1999. Negotiations over a divorce settlement dragged on
for nearly 12 months, as Anna Murdoch’s lawyers tried to determine the extent
of NewsCorp’s global assets. Financial terms of the settlement weren’t made
public, but the Murdochs have said they agreed on one crucial point: that their
children eventually would gain control of the company. Five months later Anna
Murdoch married widower William Mann, chairman of Henry Mann Securities in New
York. Rupert Murdoch and Wendi Deng were married on June 25, 1999, 17 days
after his divorce became final.